Revisiting the porter hypothesis: An empirical analysis of green innovation for the Netherlands

van Leeuwen, George and Mohnen, Pierre (2013). Revisiting the porter hypothesis: An empirical analysis of green innovation for the Netherlands. UNU-MERIT.

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  • Sub-type Working paper
    Author van Leeuwen, George
    Mohnen, Pierre
    Title Revisiting the porter hypothesis: An empirical analysis of green innovation for the Netherlands
    Publication Date 2013
    Place of Publication Maastricht, NL
    Publisher UNU-MERIT
    Pages n/a
    Abstract Almost all empirical research that has attempted to assess the validity of the Porter hypothesis has started from reduced-form models, e.g. by using single-equation models for estimating the contribution of environmental regulation (ER) to productivity. This paper addresses the Porter Hypothesis within a structural approach that allows us to test what is known in the literature as the "weak" and the "strong" version of the Porter hypothesis. Our "Green Innovation" model includes three types of eco investments and non-eco R&D to explain differences in the incidence of innovation. Besides product and process innovations we recognize eco-innovation as a separate type of innovation output. We explicitly model the potential synergies of introducing the three types of innovations simultaneously and their synergy in affecting total factor productivity (TFP) performance. Using a comprehensive panel of firm-level data built from four surveys we aim to estimate the relative importance of energy price incentives as a market based type of ER and the direct effect of environmental regulation on eco investment and firms' decisions regarding the introduction of several types of innovations. The results of our analysis show a strong corroboration of the weak version of the Porter hypothesis but not of the strong version of the PH, in this case on TFP performance.
    Keyword Porter hypothesis
    Green innovation
    Environmental regulation
    Innovation complementarities
    Productivity
    JEL H23
    L5
    O32
    O38
    Q55
    Copyright Holder UNU-MERIT
    Copyright Year 2013
    Copyright type All rights reserved
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    Created: Wed, 11 Dec 2013, 17:14:33 JST